Spain will get serious market attention (public debt 68% of GDP, but private debt 227%), with unemployment among the young at 50%. The budget deficit will be 5.8% of GDP in 2012, more than 30% higher than the 4.4% target agreed by Brussels. Compliance with the new Treaty is already crumbling.

Spanish borrowing costs will rise, with growth uncertain.

Attention will then switch to Italy (debt 120% of GDP now) and France, both too big to save through Draghi largesse to their banks.

French borrowing costs will begin to edge up (approaching 6% by end-2012?).

Economic recovery in France will come to a halt, with Italy less hesitant.

Stock markets will be weak in both countries and, possibly, worldwide.

Property prices will flatline in both countries.

Germany will not help further (showing that a real currency union is definitively out of the question). Lombard Street Research: ‘The euro can only survive if it becomes a fiscal transfer union with national sovereign debt subsumed in eurozone bonds’.

Germany will demand Draghi‘s resignation by Q3 of 2012.

Hollande is elected President in France: social unrest as public spending is reduced. He will abandon the new Treaty 3% limit and pay strikers and others to keep them off the streets. Inflation will rise.

Growth will be at a standstill in France, and slow in Italy, for 2/3 years.

Germany will still grow on the basis of non-EU exports, benefitting from Euro weakness.

France and Italy will stay in the Euro (but Belgium?).

The Euro will fall against most currencies.

The UK then loses the confidence of international capital markets (public and private debt already today at 500% of GDP). Gilt borrowing costs will climb to 5% or more by early 2013.

UK inflation will rise. The Bank of England will raise interest rates. Growth will slow or fall. Property and stock market prices will fall generally. Negative housing equity will spread in 2013 and 2014.

Discontent will rise with UK coalition government. Sterling will fall on Labour’s improving election prospects. Growth will fall in 2013, with poor prospects for 2014.

An early election will be called by Prime Minister Cameron to have some chance of re-election before the storm, at the latest in early 2013. The LibDems will align with Labour.

Greece and Portugal will start to recover after 18 months with independent currencies, zero debts, a competitive exchange rate, but high inflation. The message of independence will begin to be understood elsewhere in the EU

The Euro expansion as structured will be recognised as a grave mistake, even in Brussels.